P-Card Pitfalls and Audit Concerns

Transcription

1 Office of Business & Financial Services Procurement Card Program P-Card Pitfalls and Audit Concerns

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3 Objectives Overview of P-Card program User roles & responsibilities Monitoring P-Card use within department Ways to have a compliant program!

4 P-Card Program History Piloted in 1997 & implemented in 1998 Allowed Air/Rail/Bus tickets in 2004 Program management centralized with the creation of the Corporate Card Office in October, 2005

5 What is the Corporate Card Office? Consolidated University P-Card program Provide central help desk for support Provide training customized to users Review transactions for compliance with policies Liaison to JP Morgan Chase

6 P-Card Statistics 5,784 active P-Cards 482,941 total transactions 2006 $123,354,123 total spend 2006

7 P-Card Program University s Procurement Card Cards are issued to individual not department Purchases within per transaction and cycle limit Reconciliation is done electronically within P-Card Web software

8 Card Security Use of the P-Card By Anyone Other than Cardholder is PROHIBITED Do not place card number on file at a vendor Cardholder is responsible for all charges made with the P-Card.

9 Phishing Never give out your secure information to anyone on phone or if they contact you. Ask for the individual s name and department at the bank then tell them you will call them back. Do not ask for phone number. Use the Bank s phone number on the back of the card and ask the operator to connect you to the individual.

10 Tax Exempt Always bring to the attention of the vendor that you re making a purchase on behalf of the University of Illinois and that the University has a tax exempt status with the Illinois Department of Revenue Take a copy of the tax exempt letter

11 Retention of Receipts You must have a receipt for all transactions Original Receipt Retention The original receipt must be retained for a period of 5 years plus current year The reconciler and approver must review the original receipt when they reconcile/approve Receipts should be filed in the Department s Business Office

12 Lost/Stolen Card Cardholder should contact the bank immediately at , Ext 5405 Immediately advise your Department Card Manager

13 Policies and Procedures OBFS Business and Financial Policies and Procedures manual Section 7.6 The University P-Card Section 8.12 Business Meals and Refreshments Section 8.13 Allowability and Funding of Certain Expenditures

14 P-Card MCC Group Setups U1E Travel Cardholders designated to pay for Airline / Rail / Bus tickets and purchase of hotel rooms for event charges and to pay for appropriate hotel lodging charges for nonemployees. (This would include visiting speakers and candidates interviewing for faculty and/or staff positions.) Does not include hotel, car rental, limo and other in-travel status expenses for University employees. To setup additional or change individuals with travel MCC s on the P-Card, the DCM must a request to the CCO.

15 Prohibited-Restricted Purchases* Contracts/Quotes requiring a signature Charter Air / Bus Lab or specialty gases *OBFS Business and Financial Policies and Procedure, Section 7.6

16 Prohibited-Restricted Purchases* Consultant Fees Health Care Providers Independent Contractors Professional and Artistic Services *OBFS Business and Financial Policies and Procedure, Section 7.6

17 Prohibited-Restricted Purchases* Recurring transactions Monthly Cell phone Charges Monthly ISP Charges (Internet Services Provider) *OBFS Business and Financial Policies and Procedure, Section 7.6

18 Prohibited-Restricted Purchases* Insurance and Liability Issues On-site Labor Installation Repairs / Maintenance of equipment *OBFS Business and Financial Policies and Procedure, Section 7.6

19 Prohibited-Restricted Purchases* Insurance and Liability Issues Catering Deliver/Setup &/or Serve Food Only Aramark approved for on-site Box Lunches-only delivered *OBFS Business and Financial Policies and Procedure, Section 7.6

20 Prohibited-Restricted Purchases* Business Meals Purpose of Meal List all attendees Maximum Allowable Amounts for Business Meals *OBFS Business and Financial Policies and Procedure, Section 8.12

21 Prohibited-Restricted Purchases* Flowers to employees or students for personal reasons Gift certificates / Gift cards Human Subjects *OBFS Business and Financial Policies and Procedure, Section 8.13 & 8.10

22 Exceptions Exception Request Form One-time or Ongoing Commodity or Dollar restriction of per transaction or cycle limits

23 How does the P-Card work? Cardholder Vendor Bank P-Card Web Solution Reconciler Order Log Transactions Approver Banner

24 Department Card Manager Administers the P-Card program for department Processes initial card applications Performs card maintenance Ensures cardholders are trained Monitors cardholder transactions Ensures compliance with relevant policies and procedures Ensures independent eyes are looking at each transaction in reconciliation process

25 How to stay in Compliance? Cardholders are not sharing cards Reconciliation is done within the 7 day period in the P-Card software Receipts are filed and kept for a period of 5 years plus current year All transaction comply with the OBFS Business and Financial Policies and Procedures

26 Inappropriate Transactions Fraud Misuse Negligence

27 What is Fraud? A deception deliberately practiced in order to secure unfair or unlawful personal gain

28 What Fraud is NOT? Misuse Negligence

29 Misuse Not for personal gain Purchasing Prohibited or Restricted items Intentionally splitting a purchase to circumvent cardholder s per transaction limit Ignoring supervisor /department / university instructions and/or policies and procedures

30 Negligence Not for personal gain Sloppy recordkeeping Unsecured record retention Lack of receipts Auto-reconciling/approving of transactions

31 How to eliminate Fraud / Misuse / Negligence? Everyone must take responsibility Not only the cardholder but the reconciler and approver must also follow the policies and procedures

32 CCO Compliance Reviews Compliance with OBFS Business Policies and Procedures Terminated employee with active P-Card Terminated employees with P-Card roles Reconciliation within P-Card software Original Receipt Retention Prohibited/Restricted items

33 Department Visits Compliance issues Auto-reconciliation/approve Record retention Re-training

34 Training Classes Sign-up on OBFS Website Hands-on cardholder/reconciler/approver Department Card Managers (DCM) Department Retraining-customized Brown Bag Presentation

35 Corporate Card Office Contact Information or fax (select P-Card)

36 Questions?